Stockmarket/Horse Players

[misscashalot]

which is easier to profit by:
Stockmarket or Horse racing?

Your opinion if you please.

[Robert Goren]

Horses by far. Not as many crooks in horse racing.

[TJDave]

Not as many crooks in horse racing.

:lol:

Willie Sutton would agree.

[johnhannibalsmith]

Horses by far. Not as many crooks in horse racing.

Funny, I didn't feel qualified to answer at first and then the same thought came to me so I too went with racing. :lol:

[thaskalos]

The stock market is the easier game to make money in...but it requires more patience than the typical horseplayer possesses.

Warren Buffett became the world"s richest man by averaging a 28% ROI per year. The horseplayers I know take a couple of hundred with them to the track...and they expect to return home with thousands.

[BlueChip@DRF]

The horseplayers I know take a couple of hundred with them to the track...and they expect to return home with thousands.

I know someone like that. He thinks he can do that by depending on other people's handicapping.

[RaceBookJoe]

Horses by far. Not as many crooks in horse racing.

I wish horses were as easy as stocks. Not saying trading is always easy, but many times easier than handicapping/betting. On top of that, if trade doesnt look good, i can get out...try that as your horse is struggling around the turn :)

[Robert Goren]

I know someone like that. He thinks he can do that by depending on other people's handicapping.That is the way most people invest in the stock market.

[Valuist]

The stock market, IF one has some degree of patience. Its also not a zero sum game, like racing. What percent of people make money at the track? 5%? What percent of people make money in the market? Its significantly higher than that.

Has your Roth IRA and/or 401(k) done better than your racetrack bankroll? I would be shocked if it hasn't.

[BlueShoe]

None of the above. :rolleyes: :(

[therussmeister]

The stock market, IF one has some degree of patience. Its also not a zero sum game, like racing. What percent of people make money at the track? 5%? What percent of people make money in the market? Its significantly higher than that.

Has your Roth IRA and/or 401(k) done better than your racetrack bankroll? I would be shocked if it hasn't.
Racing is not a zero sum game for bettors, it is a negative sum game.

[BlueChip@DRF]

That is the way most people invest in the stock market.

Not when the other person doesn't know that his picks are being looked at and then gets the blame if it loses. :confused:

[Robert Goren]

The stock market, IF one has some degree of patience. Its also not a zero sum game, like racing. What percent of people make money at the track? 5%? What percent of people make money in the market? Its significantly higher than that.

Has your Roth IRA and/or 401(k) done better than your racetrack bankroll? I would be shocked if it hasn't.If you had look at them in 2009, you would have cried. Timing is everything with them. Unfortunately, a lot people don't get to time their withdrawals. Even then most people make at least a little money if they are able to leave it in long enough. I actual did very well with my 401 k in the 1990's, but I don't pretend it was anything other than dumb luck. Bought Micron at 11 and sold 111. I think it is back to 11 now. Little did I know that some fund manager would drive up the price. I bought it because my sister-in-law's nephew's godfather work there and he told my brother that they were going to great things in the PC business. Yeah, right! A friend bought it on the way down and lost his shirt. My company's 401k plan allowed us to pick our own stock if we wanted. I know most don't, they just give you a list of funds to pick from. Probably safer that way.

[acorn54]

well it really depends on your approach.
like someone else said if you expect to turn a few hundred into a few thousand overnight you probably will be in for a rude awakening
i read the balance sheets and income statements of the companies to see if they are being well-run and invest for my retirement (long term)
i really don't have a choice as there is no other investment vehicle that gives returns adaquate for retirement.
people that i know that are retired have a multiple stream of income-social security-pension-and stocks that pay dividends.

[TJDave]

The stock market, IF one has some degree of patience. Its also not a zero sum game, like racing.

It was...until the banks got involved. ;)

[badcompany]

It was...until the banks got involved. ;)

The banks were always involved. They are the "House" of the stock market.

[Robert Fischer]

horses

[Stillriledup]

Stock market is probably easier because if you lose in the stock market, you dont lose it all in one fell swoop (at least on most occasions). In racing if you lose a bet you lose everything.

[therussmeister]

Stock market is probably easier because if you lose in the stock market, you dont lose it all in one fell swoop (at least on most occasions). In racing if you lose a bet you lose everything.
But smart horse players risk a very small percentage of their bankroll on each bet. Right now I have precisely 0% of my bankroll in play.

[thaskalos]

When I browse at the financial section of my local bookstore, I see the books of many stock market experts. But the horse racing experts seem few and far between...

[HUSKER55]

Are you familiar with the expression "those that can't...teach", which also includes writing books

[badcompany]

Are you familiar with the expression "those that can't...teach", which also includes writing books

One thing that's easier to do with horse racing is to insulate yourself from the noise. The market is way more mainstream.

[Bettowin]

Stock market is easier no question. Time is on your side with stocks. Racing is a feast or famine unless the comparison is over a year or more.

How about a challenge here? Stocks versus racing. Start with 100K bankroll and have one year.

[Robert Goren]

Stock market is easier no question. Time is on your side with stocks. Racing is a feast or famine unless the comparison is over a year or more.

How about a challenge here? Stocks versus racing. Start with 100K bankroll and have one year.That depends whether you think a recession is on the way. Everybody is a genius in a bull market. Most people are idiots when a bear market strikes. The stress is a lot more in horse racing, at least for me. A 100K bankroll for betting would probably kill me. If I made it through the year, I think I could at least double it. A 100k to play the market, I probably lose half of it, but it would be a lot less stressful. I'll take the market.

[Bettowin]

We don't have to do the stock people vs the handicappers. Everyone gets the same amount for each side and let it play out. I think we would all learn a lot from each other, I know I would.

If you don't do stock and only horses don't play the horses and vice versa. If you play both do both in the challenge.

FWIW I think we have the best of both world's here and it would be fun?

[acorn54]

unfortunately like bob said- if the contest is done during a bull market vs a bear market there will be a great difference in results most likely.
most people that want to put money in the stock market for retirement are best taking john bogle's advice and just putting their money in one of the vanguard index funds.

[Actor]

Many years ago after reading A Random Walk Down Wall Street I made investing in index funds my primary strategy.

Handicapping is a negative sum game. You have to overcome the take out to profit. For me it's a hobby.

Index funds are a positive sum game. While the fund gets a management fee that fee is small compared to the profits. By investing in an index fund you are, in effect, plugging yourself into the national/world economy. In the long term (years/decades) it's almost impossible to lose. (I would have omitted the word "almost" were it not for the fact that in recent years the market has made me nervous.)

What I think is great about index funds is that their selection of which stocks to buy/sell is mechanical. That means my money is not being used to pay a big research team to try to outguess the market, ergo, management fees can be, and are, smaller. :cool:

[Robert Goren]

Many years ago after reading A Random Walk Down Wall Street I made investing in index funds my primary strategy.

Handicapping is a negative sum game. You have to overcome the take out to profit. For me it's a hobby.

Index funds are a positive sum game. While the fund gets a management fee that fee is small compared to the profits. By investing in an index fund you are, in effect, plugging yourself into the national/world economy. In the long term (years/decades) it's almost impossible to lose. (I would have omitted the word "almost" were it not for the fact that in recent years the market has made me nervous.)

What I think is great about index funds is that their selection of which stocks to buy/sell is mechanical. That means my money is not being used to pay a big research team to try to outguess the market, ergo, management fees can be, and are, smaller. :cool: Index funds are great unless you draw money out during a bear market.

[pandy]

That depends whether you think a recession is on the way. Everybody is a genius in a bull market. Most people are idiots when a bear market strikes. The stress is a lot more in horse racing, at least for me. A 100K bankroll for betting would probably kill me. If I made it through the year, I think I could at least double it. A 100k to play the market, I probably lose half of it, but it would be a lot less stressful. I'll take the market.


You hit the nail on the head. Stock pickers, whether they are pro touts or fund managers, usually pick winners in bull markets and get destroyed in bear markets. During a strong bull market anyone with common sense can pick stocks.

[pandy]

I have read articles that claim that less than 10% of stock investors show a profit over the long run. If that's true, then it's about the same as horse bettors.

The fundamental reasons why people lose are the same, they aren't good handicappers, or don't take enough time studying, they make bad decisions based on their gut instincts (fear and greed), or they simply don't know how to bet because they don't understand how to spot value and how to leverage their money.

[Actor]

Index funds are great unless you draw money out during a bear market.Oh, how true. And since I'm now retired I'm taking money out and no longer putting it in. :bang: But the bear market seems to be past and my balance is still going up.

On the other hand putting money in during a bear market is doubly great. :ThmbUp: :ThmbUp:

[acorn54]

I have read articles that claim that less than 10% of stock investors show a profit over the long run. If that's true, then it's about the same as horse bettors.

The fundamental reasons why people lose are the same, they aren't good handicappers, or don't take enough time studying, they make bad decisions based on their gut instincts (fear and greed), or they simply don't know how to bet because they don't understand how to spot value and how to leverage their money.


i wouldn't try to compete with my money set aside for my retirement with the sharks on wall street. what you say about the small success rate of people trying to pick winning stocks may be true. index funds on the other hand don't try to pick stocks but simply invest in indexes. if you look at the index funds over your lifetime you will see they have done well as compared to other investments. the key to it is not to try to time the market and just simply dollar-cost-average whether you are putting into the index funds or if you are in your retirement years, drawing out your investments.

[Valuist]

It was...until the banks got involved. ;)

When have the banks NOT been involved with the market?

[Valuist]

If you had look at them in 2009, you would have cried. Timing is everything with them. Unfortunately, a lot people don't get to time their withdrawals. Even then most people make at least a little money if they are able to leave it in long enough. I actual did very well with my 401 k in the 1990's, but I don't pretend it was anything other than dumb luck. Bought Micron at 11 and sold 111. I think it is back to 11 now. Little did I know that some fund manager would drive up the price. I bought it because my sister-in-law's nephew's godfather work there and he told my brother that they were going to great things in the PC business. Yeah, right! A friend bought it on the way down and lost his shirt. My company's 401k plan allowed us to pick our own stock if we wanted. I know most don't, they just give you a list of funds to pick from. Probably safer that way.

So you did well in the 90s with what you said was dumb luck. Do you think anyone could bet horses for a decade and do well with dumb luck?

Not trying to rip on you because a lot of people did well in the 80s and 90s (and also from 2003-2007, and 2009 til now) with "buy and hold", or basically set and forget.

[DeltaLover]

Horses are easier than stock market by a city block

[thaskalos]

Horses are easier than stock market by a city block

We know that you have taken a little break from our forum here...so we must assume that you have recharged your batteries somewhat.

Would you mind expanding on your answer a little bit?

Surely you are not suggesting that you know more winning horseplayers than you do profitable stock market investors...

[RaceBookJoe]

Horses are easier than stock market by a city block

Totally disagree, cant remember my last $2000/day betting horses...cant remember my last trading day making less than that. But to each their own.

[thaskalos]

Totally disagree, cant remember my last $2000/day betting horses...cant remember my last trading day making less than that.

THAT'S FANTASTIC...assuming, of course, that you don't have amnesia...:)

[DeltaLover]

We know that you have taken a little break from our forum here...so we must assume that you have recharged your batteries somewhat.

Would you mind expanding on your answer a little bit?

Surely you are not suggesting that you know more winning horseplayers than you do profitable stock market investors...


OK, let me clarify my laconic statement which I admit at first glance looks a provocative aphorism!

First of all let me define what I mean by 'stock market'. I certainly do not refer to a traditional investment to a stock with the hope of earning dividends and possibly benefit from 'organic' business growth. Such an approach looks at least romantic nowadays that stock market looks more and more like a huge casino where expectations and hope is traded.

The emerge of numerous derivatives like exotic options, swaps and even Binary Options converted the market to a real game a chance very similar to horse racing having exactly the same participants like naive 'investors', wannabe pros, hasslers and above all WHALES. The difference with horse racing is that since in stock market the figures contain way more trailing zeros, is something that makes the whales (hedge funds, investment banking or even 'institutional investors' lately) way more dominant. The very top brains of the world are trying to beat each other's trading systems using the most advanced hardware topologies money can buy, shifting the purpose of stock market from production and growth to speculation and short term profitability. Obviously in such an environment any type of success (especially from an individual small 'investor') can be credited to luck and chance more than anything else.

To answer your question although I am not sure if I know more winning horse players than SM investors I have no doubt of who are the largest losers ( I mean by margins of thousands), who can be found among some of the 'top' street wizards who managed to burn billions expecting their models to beat their competitors!

[Robert Goren]

So you did well in the 90s with what you said was dumb luck. Do you think anyone could bet horses for a decade and do well with dumb luck?

Not trying to rip on you because a lot of people did well in the 80s and 90s (and also from 2003-2007, and 2009 til now) with "buy and hold", or basically set and forget.Yes, but I doubt that I could ever get as lucky as I did with Micron. Nearly $100,000 in less than 2 years and I didn't even sell the high. I think it went to 140. I had not looked at the stock in a while, so I check it in the newspaper. I thought it was misprint. Checked in another paper. I could hardly wait until lunch to call in the sell. I had expected the stock to double with a little luck. Got lucky with a couple others too, but not quite like that. Then 2006 rolled around and the doctors got what the taxman didn't. I was almost set a while.
I knew a guy who hit a 120k pick 6 just buy picking horses out the newspaper. No DRF. No more than 2 horses a race. I think he said he spent $32. I was told he had singled a $70 horse. He told me even the races he double all his picks ran 1-2. He made the bet as soon as doors open and then went off to be a pallbearer at a funeral. So you can have dumb luck at the track too.

[RaceBookJoe]

THAT'S FANTASTIC...assuming, of course, that you don't have amnesia...:)

Haha, no amnesia..but that also doesnt mean i dont have losing trades. Also, these are trades, no overnight holds. Heck it took me the entire Saratoga meet last year to make $4400 , took me 27 minutes to do that today. Doesnt always happen as fast, but the money is there. Yes, you also have to put more money up front, but that doesnt mean its all at risk unlike a horse race.

[DeltaLover]

Yes, you also have to put more money up front, but that doesnt mean its all at risk unlike a horse race.

The problem is that in stock market you not only can put your whole capital in risk but even capital that you do not own!

[thaskalos]

OK, let me clarify my laconic statement which I admit at first glance looks a provocative aphorism!

First of all let me define what I mean by 'stock market'. I certainly do not refer to a traditional investment to a stock with the hope of earning dividends and possibly benefit from 'organic' business growth. Such an approach looks at least romantic nowadays that stock market looks more and more like a huge casino where expectations and hope is traded.

The emerge of numerous derivatives like exotic options, swaps and even Binary Options converted the market to a real game a chance very similar to horse racing having exactly the same participants like naive 'investors', wannabe pros, hasslers and above all WHALES. The difference with horse racing is that since in stock market the figures contain way more trailing zeros, is something that makes the whales (hedge funds, investment banking or even 'institutional investors' lately) way more dominant. The very top brains of the world are trying to beat each other's trading systems using the most advanced hardware topologies money can buy, shifting the purpose of stock market from production and growth to speculation and short term profitability. Obviously in such an environment any type of success (especially from an individual small 'investor') can be credited to luck and chance more than anything else.

To answer your question although I am not sure if I know more winning horse players than SM investors I have no doubt of who are the largest losers ( I mean by margins of thousands), who can be found among some of the 'top' street wizards who managed to burn billions expecting their models to beat their competitors!

IMO...there is no rarer sight in the investment/gambling world than the winning horseplayer. By "winning horseplayer"...I mean someone who plays the game regularly, and actually increases his net worth substantially with the passage of time. I am not talking about the guy who plays the game once in a while...and calls himself a winner just because his profits manage to pay for the racing forms that he uses.

If I were advising a young man who was asking me for advice on what to do with his savings in order to prepare for retirement in 30+ years...the last place I would suggest to him as an investment vehicle would be the race track.

The stock market is a much safer place for the intelligent person to venture into...in my opinion, at least. The careless, reckless person will always find a way to destroy himself...no matter where he eventually ends up.

It takes time and effort to get educated in the ways of the financial markets too...but it's a bigger game...and the rewards are worth the effort.

The same cannot be said about the race track.

[RaceBookJoe]

The problem is that in stock market you not only can put your whole capital in risk but even capital that you do not own!

Only if you use margin. You can also lower your risk using options, unless you sell naked, then you can get hurt. Today is a 5 figure day so far, not typical, but not unrealistic in this market.

[DeltaLover]

Who does not?

[RaceBookJoe]

Who does not?

I use margin, but i use stop losses also. Traders have to know what they are doing.

[thaskalos]

Only if you use margin. You can also lower your risk using options, unless you sell naked, then you can get hurt. Today is a 5 figure day so far, not typical, but not unrealistic in this market.

Joe...let me know if you are looking for a business partner.

A very silent partner...:)

[RaceBookJoe]

Joe...let me know if you are looking for a business partner.

A very silent partner...:)

I will cut you in for half of my next 10-cent superfecta based on your writings haha.

[Valuist]

I knew a guy who hit a 120k pick 6 just buy picking horses out the newspaper. No DRF. No more than 2 horses a race. I think he said he spent $32. I was told he had singled a $70 horse. He told me even the races he double all his picks ran 1-2. He made the bet as soon as doors open and then went off to be a pallbearer at a funeral. So you can have dumb luck at the track too.

He got lucky once. I doubt that good fortune carried with him for a full decade.

[Robert Goren]

He got lucky once. I doubt that good fortune carried with him for a full decade.He blew most of it in three years. The last 10 grand disappeared from his freezer. I kid you not. His estrange wife was the #1 suspect.

[MightBeSosa]

I'm quite familiar with both games.

Neither game is 'easy' played professionally.

Both can be mastered.

For a complete nitwit, the stock market is easier to show a profit. Just look at a long term index chart. Of course, if the nitwit is buying penny stock pumps, well......

No nitwits make money betting horses in the long run.

[badcompany]

I'm quite familiar with both games.

Neither game is 'easy' played professionally.



There is a wide gulf between being profitable and being profitable enough to withdraw living expenses and, at the same time, continue to grow your capital.

[MightBeSosa]

There is a wide gulf between being profitable and being profitable enough to withdraw living expenses and, at the same time, continue to grow your capital.


And?

[thaskalos]

There is a wide gulf between being profitable and being profitable enough to withdraw living expenses and, at the same time, continue to grow your capital.

Even if you don't withdraw living expenses from the bankroll, there is still a wide gulf between just being "profitable"...and substantially increasing your bankroll over time.

Most of the horseplayers who call themselves "profitable" are barely covering their gambling expenses...and they take solace in the fact that the vast majority of the other players out there are incapable of doing even that.

It takes a great player to actually increase his bankroll substantially over time.

[Robert Goren]

In either case, you are going to need a substantial bankroll, if you are going to live off your profits. Somebody with 10k bankroll isn't going live off his profits in either the stock market or by betting the ponies.

[badcompany]

In either case, you are going to need a substantial bankroll, if you are going to live off your profits. Somebody with 10k bankroll isn't going live off his profits in either the stock market or by betting the ponies.

This is what usually sinks most wannabes. They're dramatically under-capitalized and try to make up for it by overtrading/betting.

[MightBeSosa]

actually, if you're a great player, because of the high churn rate, a fairly small starting 'roll with grow quickly.

[RaceBookJoe]

In either case, you are going to need a substantial bankroll, if you are going to live off your profits. Somebody with 10k bankroll isn't going live off his profits in either the stock market or by betting the ponies.

$10K is definately not enough if you buy the actual stocks, but can be ok if you use options, BUT that also means you have to know what you are doing. Having said that, i recommend having a larger bankroll. Old racing quote, " the person who wins is in the one with a lot shooting for a little, not the one with a little shooting for a lot."

[RaceBookJoe]

This is what usually sinks most wannabes. They're dramatically under-capitalized and try to make up for it by overtrading/betting.

The other thing thats sinks them quickly is not cutting losses quick enough and vice versa, not letting their winning trades run and/or not adding to those winning positions. Wouldnt it be nice if we could do that with horses, horse has a 10 length lead in the stretch and we could double our bets :)

[1st time lasix]

I have an advanced degree in finance and 31 years of experience at a major Wall Street firm advising clients on investments....all asset classes- including publically traded equities. I have become an expert in risk analysis....and probabilties Currently responsible for about $175 million in my book of business..... I have learned some valuable lessons along the way that lead me to the conclusion {with 100 percent certainty} that profitable stock market investing is far, far easier than horse playing. Stocks represent ownership of an ongoing concern....companies pay dividends while you wait ... educated managements are getting better customer and inventory data. Capitalism is spreading yhrough the emerging markets. The takeout at the track is onerous. That alone makes this argument rather silly.

[classhandicapper]

I've been investing in the stock market since 1986 and playing horses since about 1976. There is no comparison. The stock market is monstrously easier. There is such a massive gap between the two this should not even be a debate.

[badcompany]

My parents were both Stock Market investors. I remember, as a kid, asking my father how much it cost to buy a stock. He said the commission was $50 to buy or sell.

Fast forward 30 years and it costs me $7.

Throw in inflation and that's over a 90% reduction in commission costs.

Where is the Horseracing equivalent of that?

[Robert Goren]

I have an advanced degree in finance and 31 years of experience at a major Wall Street firm advising clients on investments....all asset classes- including publically traded equities. I have become an expert in risk analysis....and probabilties Currently responsible for about $175 million in my book of business..... I have learned some valuable lessons along the way that lead me to the conclusion {with 100 percent certainty} that profitable stock market investing is far, far easier than horse playing. Stocks represent ownership of an ongoing concern....companies pay dividends while you wait ... educated managements are getting better customer and inventory data. Capitalism is spreading yhrough the emerging markets. The takeout at the track is onerous. That alone makes this argument rather silly. I wonder how horseplayers have spent an equivalent amount studying horse racing before jumping in with both feet. I doubt if any have. Most of us horseplayers use things we learned while do other thing and then try to apply them to horse racing. I wonder what would happen if a person actual started out trying to learn the skills to be a successful horse player before jumping in with both feet. Taking college courses in stats, logic, accounting, computer science, tax law, animal science etc. I am sure that we could put together a 4 year program for such student and he would undoubtedly be better equipped to make money by betting the horses. Of course there would be no more a guarantee that could make money than a MA in finance guarantees that you can make money in the markets.
Lasix, perhaps you could answer this. How many MA or MS in finance wash out as investors? Just curious.

[thaskalos]

"I also gave up the ponies for the equity market, taking with me the disposition to plunge big when I was right and to cut back dramatically when the odds didn't favor me. Those, after all, were the true takeaways from Picking Winners and My $50,000 Year at the Races, two excellent racing books by the Washington Post's Andy Beyer. While others read them for their handicapping insight, I saw them for what they truly were, a rigorous, disciplined way to handle risk in any endeavor involving wagering, whether sports or stocks. I combined the ability to read the fundamentals behind the stocks with insights gleaned from Beyer to generate an investment philosophy that allowed me to let my gains run but cut my losses immediately. He preached discipline in the face of fallibility. He backed a philosophy of betting large on out-of-the-way races and tracks that weren't on the radar screens of the big-time gamblers, perfect traits for the mastering of any stock market.

There are tons of investment texts out there, most of which preach buy and hold and many of which emphasize how to analyze value and growth stocks. However, few if any tell you about a disciplined style that melds conviction with the changing course of business fundamentals and emphasizes putting the big bet down when you think you have something really special, as Beyer insists. None of these investing books talk about flexibility and the need to reevaluate and change your portfolio on a regular and rigorous basis, as Beyer does his horse wagering. It was Beyer's insights that put me on the path of massive profitability. Many years later, when I was making millions of dollars a week buying and selling stocks, I would often marvel at how wasted Beyer's talents were on the small money of the ponies. The man had it in him to write the greatest investment book in history if only he knew how much horses and stocks were alike. But it was either lost on him, or he just liked the horses more than stocks."

James J. Cramer -- (From his book Confessions of a Street Addict)

[badcompany]

I didn't realize Cramer was a horseplayer.

I hate him a little bit less, now ;)

[PaceAdvantage]

Cramer was making millions a week in the markets? On a stock message board I used to frequent, he had the worst rep of anyone...still does...

[RaceBookJoe]

Cramer was making millions a week in the markets? On a stock message board I used to frequent, he had the worst rep of anyone...still does...

I thought i read that he did really well when he had his hedge fund. Since his show has been on, he has been hit or miss..a much better fundamentalist than a timer.

[pandy]

I had never read that Cramer quote on Beyer, pretty cool. Many experts suggests that betting more on horses that you love is a mathematical error and that you should either bet the same amount on every horse or follow some sort of betting method, such as Kelley. I'm with Beyer/Cramer because if you have good instincts sometimes you have to take a shot.

[DeltaLover]

As we have said before, a Kelly betting scheme represents a poor fit for horse betting, since neither the final odds nor the real probabilities are known.

I think that the key concept in bet sizing, lies in game theory, which if applied properly should create the possibility for large scores with relatively small investment.

This been said, I have to repeat that fixed size betting is one of the weaker approaches, representing an extremely conservative progression, which although acceptable if your main goal is to extend your betting experience as much as possible, it still is a terrible way to extract any real profit from this game.

[badcompany]

I had never read that Cramer quote on Beyer, pretty cool. Many experts suggests that betting more on horses that you love is a mathematical error and that you should either bet the same amount on every horse or follow some sort of betting method, such as Kelley. I'm with Beyer/Cramer because if you have good instincts sometimes you have to take a shot.

While "Taking a shot" can occasionally work out, the record of "experts" forecasting future price movements is very poor.

For all his supposed knowledge, Cramer's top pick for the year of a financial crisis was a financial stock:

Goldman started 2008 at $225 and ended the year at $90. So, Cramer was wrong by the entire Market Cap of the stock.


http://nymag.com/news/businessfinance/bottomline/42392/

The Future of Business
What stories will dominate the financial world in 2008? Our Wall Street guru makes his predictions.

By James J. Cramer Published Dec 30, 2007

1. Goldman Sachs makes more money than every other brokerage firm in New York combined and finishes the year at $300 a share. Not a prediction—an inevitability. In fact, it’s only January, and I think it’s already come true.

[RaceBookJoe]

I had never read that Cramer quote on Beyer, pretty cool. Many experts suggests that betting more on horses that you love is a mathematical error and that you should either bet the same amount on every horse or follow some sort of betting method, such as Kelley. I'm with Beyer/Cramer because if you have good instincts sometimes you have to take a shot.

The only negative in the win pool of horses, the more bet the lower the odds. But you do get to decide where your odds cutoff is. In relation to stocks, you can load up and keep your stop loss fairly tight, which you cant one the gate opens in a race. What i do with stocks is always have a determined stop loss in relation to my profit target and i usually look for " higher odds " . I will take a 50c loss if i see a potential $2 move coming for example. Stop loss can be adjusted upwards, but i never adjust it downwards. Profit targets i will usually take some off and let the rest run..so you have some playability once your stock gets out of the gate. Share size can also help with your risk tolerance. If you have been following TSLA the past week or 2, TONS of money to be had. Here is one more positive for stocks, unlike a hot horse whose odds will tend to lower in each race..hot stocks tend to give many great trades over an extended time. Hope some of that made sense and wasnt too rambling.

[DeltaLover]

What stories will dominate the financial world in 2008? Our Wall Street guru makes his predictions


Those who are selling themselves as Wall Street gurus know no more or less about future market behavior than any NYC taxi driver. Stock market investing does not cultivate expertize, see Taleb's books for more.

[PaceAdvantage]

Goldman Sachs traders have proven time and again that trading is not a random walk. Now, you can counter and say they are operating on the fringe of legality and perhaps crossing over that line via inside information or market manipulation.

But the fact remains, GS as well as many other trading houses and hedge funds have proven track records that show trading is anything but a random walk.

[PICSIX]

Haha, no amnesia..but that also doesnt mean i dont have losing trades. Also, these are trades, no overnight holds. Heck it took me the entire Saratoga meet last year to make $4400 , took me 27 minutes to do that today. Doesnt always happen as fast, but the money is there. Yes, you also have to put more money up front, but that doesnt mean its all at risk unlike a horse race.

If you don't mind me asking, what was the percentage gain of that 27 minute trade?

[badcompany]

If you don't mind me asking, what was the percentage gain of that 27 minute trade?


Asking an anonymous guy on the Internet about his income is akin to asking him how often he gets laid. The probability of getting an honest answer is very low. :rolleyes:

[Robert Goren]

The problem with the stock market is that it is very hard to be sure the information you have on a stock is accurate. Some very large companies have gone under after they lied on their earning statement. I was watching a CNBC show last night on a company called Health South. They talked to several of the companies former CFOs about the accounting tricks they used to appear be more profitable than they were. One them said at one point the taxes they were paying on the reported income was more than what they actually making.

[RaceBookJoe]

Goldman Sachs traders have proven time and again that trading is not a random walk. Now, you can counter and say they are operating on the fringe of legality and perhaps crossing over that line via inside information or market manipulation.

But the fact remains, GS as well as many other trading houses and hedge funds have proven track records that show trading is anything but a random walk.

Totally agree.

[RaceBookJoe]

If you don't mind me asking, what was the percentage gain of that 27 minute trade?

I honestly never pay attention to %, its meaningless to me because i pay more attention to the dollar figure. I dont remember the specifics of that trade or trades, but here are a couple from today. First hour or so i made 13 trades with 11 winners and 2 losers. Example of a % trade though for you, bought 10 $450P on AAPL for $4.80 and sold them 3 min later for $6 for nice 25% trade. On a poor % trade today I shorted 1000 shares of VRTX at $82 and and covered 5 min later at $81.50...so not a good %, but still $500 profit. Had some better trades in there also, and the 2 losers cost me about $1100 ( one a 4t loss on /ES after a nice gain, the other a 5 tick loss on /6J..where had i not jumped the gun, i missed an even better setup that threw off 30t ). So overall, if you follow %, the gains and losses will be larger on options/futures and less on full stock positions for the most part. Hope that helps. Every trade is different, once entered anythign can happen..both good and bad, just have to protect yourself against things going really bad against you.

[RaceBookJoe]

The problem with the stock market is that it is very hard to be sure the information you have on a stock is accurate. Some very large companies have gone under after they lied on their earning statement. I was watching a CNBC show last night on a company called Health South. They talked to several of the companies former CFOs about the accounting tricks they used to appear be more profitable than they were. One them said at one point the taxes they were paying on the reported income was more than what they actually making.

So much easier using charts and TA, nice clearer picture of whats being bought and sold.

[Valuist]

So much easier using charts and TA, nice clearer picture of whats being bought and sold.

Agreed.

Now might be a good time to make sure one has a number of stop losses in place. There's been some good gains the past few years, but realistically, it was all driven by the QE. And when that goes away, reality is going to sink in, and it won't be pretty.